In hopes of boosting the competitiveness of China’s three major telecom carriers, the Chinese government signed off on a series of mergers that would enable China Netcom, China Telecom, and China Mobile to offer a threeway portfolio of fixed, wireless, and broadband services. Although China Telecom, China Netcom, and China Mobile each command more than 100 million customers, the companies’ growth has been limited as each operator is focused exclusively on either fixed or wireless services. Under the plan reported late last week, fixed-line operator China Netcom would acquire the GSM wireless operations of China Unicom, which has more than 118 million subscribers. China Unicom’s 41 million CDMA wireless customers would be transferred to China Telecom. China Mobile, meanwhile, would merge with fixed-line operator China TieTong Telecommunications (formerly China Railcom), which ranks as one of China’s smaller fixed-line operators with 20 million customers that include 3 million broadband subscribers. Officials did not provide a timetable for completion of the reorganization plan. Although China Telecom, China Netcom, and domestic and foreign equipment makers are expected to benefit from the plan, analysts predict that China Mobile—one of the world’s largest wireless carriers—may lose market share once China Netcom and China Telecom begin to take on mobile phone customers.
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Beijing plans realignment of Chinese telecom sector
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